Case Study of ERP on Rolls-Royse

2. INTRODUCTION
Enterprise Resource
Planning (ERP) is an
integrated computer-
based system used to
manage internal and
external resources,
including tangible assets,
financial resources,
materials, and human
resources.
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3.  ERP allows the corporate management of a business, and aims to
integrate individual functional systems such as manufacturing,
finance, procurement and distribution.
 ERP uses Internet technologies to integrate the flow of
information from internal business functions as well as
information from customers and suppliers.
 The system uses a relational database management system,
within client/server network architecture, to capture valuable
management data. The key principle behind the system involves
entering the data from a series of modular applications only
once.
 ERP systems offer companies the following three major benefits:
 Business process automation.
 Timely access to management information.
 Improvement in the supply chain via the
use of E-communication and E-commerce.
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4. IMPLEMENTATION OF ERP
 ERP when successfully implemented, links all areas of a company
including order management, manufacturing, human resources,
financial systems, and distribution with external suppliers and
customers into a tightly integrated system with shared data and
visibility.
 Potential benefits include drastic declines in inventory,
breakthrough reductions in working capital, abundant information
about customer wants and needs, along with th ability to view and
manage the extended enterprise of suppliers, alliances and
customers as an integrated whole.
 ERP implementations involve, in truth, broad organisational
transformation processes, with significant implications to the
organisation’s management model, organisation structure,
management style and culture, and particularly, to people.
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5.  Most ERP software vendors supply their customers with an
implementation programme as part of an overall solution package.
 For example SAP provides some of its customers with accelerated
SAP (ASAP). ASAP suggests the adoption of a ‘big bang’
implementation.
 This programme opts for a quick implementation that is
specifically designed for small and medium sized companies.‘Big
bang’ implementations offer lower costs and generally use only a
few of the software’s interfaces, however the risks are greatly
increased, as less time is spent on development and assessing
business needs.
 The key factor of an ERP implementation
is the way in which the software is configured.
 The most important issue to identify
before an implementation is the
‘core’ of the business,
which can be identified by the use of the business model
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6. case study

7. COMPANY BACKGROUND
 This case study conducted at Rolls- Royce investigating the
implementation of ERP (SAP) is discussed.
 Rolls-Royce, a world-leading provider of power systems and
services for use on land, at sea and in the air, has established
a strong position in global markets - civil aerospace, defense
aerospace, marine and energy.
 Rolls-Royce today has a broad customer base comprising
more than 600 airlines, 4,000 corporate and utility aircraft
and helicopter operators, 160 armed forces, more than 2,000
marine customers, including 70 navies, and energy
customers in nearly 120 countries, with an installed base of
54,000 gas turbines.
 Annual underlying revenues were £10.1 billion in 2009, of
which about half came from services revenues. The firm and
announced order book stood at £58.3 billion at 31 December
2009, providing visibility of future levels of activity.
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8. THE SITUATIONS BEFORE ERP
 Rolls-Royce used 1500 legacy systems before ERP project was
started.
 These legacy systems were difficult decision making and
performance assessment.
 Rolls-Royce implemented another system MERLIN, which
stands for mechanized evaluation of resources, logistics and
inventory.
 MERLIN often had difficulty communicating with another
manufacturing system named IBIS, IBIS was an older
manufacturing system that was used at the Bristol and Antsy
facilities.
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9. IT AT ROLLS-ROYCE
 In 1996 Rolls-Royce formed a partnership with electronic
data services (EDS). The Rolls-Royce IT department was
outsourced to EDS, which meant that EDS were
responsible for the development of the company’s IT
systems.
 Rolls-Royce implemented ERP PROJECT consists of a
management team of specialists from the external
outsourcing company EDS.
 In conjunction with this team each OBU has its own ERP
planning team, which is responsible for implementing
working changes and training.
 The project implementation problems can be grouped into
three areas……...........
1. Cultural Problem
2. Business Problem
3. Technical Problem
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10. Cultural problems
 New function might not get the full appreciation the legacy
systems once had.
 Implementation of new system require training which cost is
very expensive.
Business problem
 ERP are rigid and difficult to adapt to the specific workflow
and business process ,—this is cited as one of the main
problem for implementation .
 Cost of switching old system to new system is very high .
Technical problem
 Accuracy of data
 Duplication of data was a major concern
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12. Modification made to Legacy System
Suite 1
 Plan the supply chain:
The supply chain capacity was compared to the range of possible sales
scenarios
 Master schedule key programmes:
The sales and operating review board (SORB), makes decisions affecting
changes to achieve capacity.
Suite 2
 Plan and schedule the factory:
This converts the agreed schedule from suite 1 into a production plan.
 Schedule the shop:
This converts the production plan into a detailed shop plan.
Suite 3
 Operate the Factory:
It control of workflow through the shop from the initial generation of
launch paperwork, right through to delivery of finished products.
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13. Suite Implementation
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14. The ERP pilot  Initial problem Experienced:
 The purpose of the pilot was
to demonstrate:  User authorisation problems
 business principles  Transaction problems
 processes occurred from the first MRP
run
 procedures  Route cards were unavailable
 role definitions and  Values between the systems
behaviours were incorrect, so
 software, hardware and data comparisons were made on
transfers the values from the legacy
system with those on the new
 Creation of New Roles: system
 MRP controllers
 Capacity owners
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15. The ‘Go live’
The Process goes as follows
 The data must be kept in a ‘stable’ state for a period of roughly 10 weeks.
 The initial data to be transferred includes some transaction data and
master data
 If any changes occur to the data on the old systems after the transfer, they
are logged and then passed through to the new system
 Running the MRP system to initialise the whole system.
 The whole ‘Go Live’ process took roughly 2 weeks to complete, and during
this time the new system was ‘off the air’.
Project Risk
 The non-delivery or non-availability of reliable IT hardware and
infrastructure both before and during implementation
 Possible failure to give ERP adequate priority due to the number of
existing and ongoing business improvements.
 Possible failure to cut over to the new system through an inability to load 15
data. Enterprise information systems project implementation: A case study of ERP in Rolls-Royce

16. Conclusion
 Increased orders from the market place, and also from the fact that ERP
has become a standard solution world-wide within the Aerospace and
Defence industry.
 Rolls-Royce produce a range of quality world class turbine engines, and
have recognised that they must change in order to compete effectively
with their competitors.
 Accurate information systems and direct communication with suppliers
are vital when offering customers a committed promise to deliver.
 The partnership with EDS has produced a sound architectural framework
for the project, thus allowing Rolls-Royce to concentrate its efforts on
manufacturing turbine engines.
 Managing effective relationships and leading teams in both technical and
non-computer based environments.
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